How the Blockchain May Support and Facilitate Community Governance

Bitcoin was the first decentralized cryptocurrency that operate independently of any government or central bank. But the really interesting thing about Bitcoin is not the currency itself, rather than the underlying technology, the blockchain: a decentralized public ledger that relies on cryptography to ensure that every transaction is valid. As a secure and distributed datastore, the blockchain can be used for a variety of new applications, such an alternative domain name management system (Namecoin) or a cryptographically secure and decentralized public ledger (Blocksign). Most importantly, the blockchain allows for the creation of automated transactions or “smart contracts” between human and machines, or between multiple machines, which are automatically enforced by the underlying code of the technology. This, combined with the permanent storage capabilities of the blockchain, constitutes the basis on which to build new decentralized applications, such as decentralized and incentivized file-sharing (Metadisk) or distributed social networks (Gems, Twister, etc).

Amongst all the new opportunities offered by these new technologies, I am particularly interested in exploring how the blockchain can support and facilitate community governance. It is, indeed, my belief that the blockchain can help implement new forms of commons-based governance that could manage the operations and promote the long-term sustainability of commons-based peer-production (CBPP) communities.

For a long time, commons-based communities have been institutionalized around centralized or federated structures, which might bring a series of trade-offs in terms of democratic governance, flexibility, and ability to evolve. These institutions were built, for the most part, to facilitate the coordination of disparate groups of people that would otherwise have had a hard time coordinating themselves, because of either scale or lack of proper coordination mechanisms. They also served the purpose of establishing trust among groups that did not engage into sufficiently frequent and repeated interactions.

Today, traditional issues related to shared common-pool resources—such as the free rider problem or the tragedy of the commons—could be addressed with the implementation of blockchain-based governance, through the adoption of transparent decision-making procedures and the introduction decentralized incentives systems for collaboration and cooperation. The transparent and decentralized nature of the blockchain makes it easier for small and large communities to reach consensus and implement innovative forms of self-governance. The possibility to record every interaction on a incorruptible public ledger and the ability to encode a particular set rules linking these interactions to a specific transactions (e.g. the assignment of cryptographic tokens) makes it possible to design new sophisticated incentive systems, which might significantly differ from traditional market-based mechanisms.

Decentralized blockchain technologies bring trust and coordination to shared resource pools, enabling new models of non-hierarchical governance, where intelligence is spread on the edges of the network instead of being concentrated at the center. Flexible decentralized organizations could entirely replace the hierarchical format of current centralized formations, enabling commons-based communities to operate in an more decentralized manner. Instead of relying on traditional top-down decision making procedures, the blockchain allows for such procedures to be entirely crowdsourced, delegating to the community’s collective intelligence the responsibility to monitor and evaluate its own achievements.

While online communities will probably be the first one to experiment with these new apparatus, as the ease of creating these organization decreases through standardization, online communities could be easily brought offline to create and build new organizations that operates in the physical world.

Thus far, while commons-based peer-production communities have flourished in many fields of endeavor, they have had a hard scaling up, without turning into more bureaucratic and centralized institutions. It is my hope that, with the new opportunities provided by blockchain technologies, we can come up with new applications that can support the operation of these communities (both in the digital and physical world) in a more distributed and decentralized manner.